Natural Gas Price Outlook – Natural Gas Continues to See Selling

Natural Gas Technical Analysis

Natural gas continues to look extraordinarily negative as we did try to rally just a bit in the early hours here on Wednesday but gave back those gains and now it looks like we are trying to break down again. The market breaking down below the lows of the previous session, which is what we are about to do, signifies that there’s further selling.

At this point, I’m anticipating that natural gas will drop to the $2.65 level, but I also recognize that a short term rally could in fact end up being the situation is going forward, the $3 level above is a large, round, psychologically significant figure, and an area that I think offers a bit of ceiling at the moment. Keep in mind that natural gas demand is somewhat weak this time of year, unless there’s a heat wave in the US. And right now, we don’t have that scenario.

We recently saw the 50-day EMA break below the 200-day EMA, showing the so-called death cross, which, of course, is a very bearish technical signal. That doesn’t necessarily mean that we start shorting now and just hang on to that position forever, but it does add yet another thing to the chart that looks very weak. Later this year, in the next couple of months, we’ll see demand pick up for heating. But right now, we are nowhere near that, and it looks like natural gas continues to be a fade the rallies type of scenario.

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